When goods are brought into the Netherlands from a country outside the European Union (EU), Customs charges tax on them. The amount of tax depends on the country of origin and the kind of product.
Protection against low prices
Import tax is a means to protect a country’s agriculture, manufacturers and industries from cheaper products made abroad. Differences in minimum wages and the prices of raw materials mean goods can be made more cheaply in some countries. They can then be exported to the Netherlands and sold at low prices. Import taxes make foreign products more expensive and reduce price differences so that Dutch companies can compete against cheap imports.
Import duties on agricultural products
A well-known example of import tax is the import duty payable on agricultural products. Import duties support demand for products made by European farmers even though prices on the world market are lower. The duties protect the farmers’ income and ensure that farming in Europe does not come to a standstill. This is important to prevent food shortages.
Import taxes are collected by Customs and passed on to the EU. The member states may keep some of the duties to cover the cost of collection. ‘Import duties’ is a collective term for taxes that are collected on behalf of the EU. The main duties are:
- customs duties (these are set by the EU);
- charges having an equivalent effect (such as anti-dumping duties);
- taxes charged under the common agricultural policy.
Customs duties are not charged on products that are traded between one EU member state and another. Value-added tax, however, does have to be paid. Excise duty has to be paid on some products.
Common Customs Tariff
The Common Customs Tariff (CCT) applies in all EU member states. This tariff system is laid down by the EU in the common commercial policy and the Regulation on the Common Customs Tariff (2658/87) (in Dutch). Different rates apply depending on the nature, source and economic sensitivity of the products. The EU has made agreements with several countries so that they pay no – or reduced – customs duties.
Trade agreements have been concluded with:
- countries that are members of the European Free Trade Association such as Norway and Switzerland;
- overseas countries and territories such as Aruba, Curaçao and Greenland;
- South Africa and Mexico;
- Turkey (Customs Union) (in Dutch);
- African, Caribbean and Pacific states (ACP).
The trade agreement with the EFTA countries applies to industrial products only, not to agricultural goods. A full list of countries with which the EU has concluded trade agreements is available on the Chamber of Commerce’s website.
Reduced tariff for products from developing countries
Certain goods originating in developing countries may be imported at a reduced rate or completely free of tax. The Generalised System of Preferences (GSP) explains what goods are eligible and how Customs decides whether they are from developing countries.
The importer must usually present proof of origin, such as a certificate or invoice declaration, to claim the reduced or zero rate.
Tax base and tax rates
Customs duties, the most common form of import tax, are calculated on the basis of:
- the classification of the goods in the EU Common Customs Tariff;(in Dutch)
- the origin or provenance of the goods;
- in most cases, the value of the goods.
Goods are said to be dumped if they are brought onto the market at less than what they cost in the source country. Dumping is a means for exporters to win a new sales market or clear surplus stocks.
In itself, dumping by foreign companies on the European market is not forbidden, but the EU can take measures if it is harmful to an industry. It may, for example, impose an anti-dumping duty or set a minimum price for goods imported into the European Union. In response to complaints from European companies, the EU can investigate dumping by manufacturers from third countries.
Value-added tax, excise duty and environmental taxes
Apart from import duties, the Netherlands also charges value-added tax (VAT) on imported goods. The VAT rate is the same as that on domestic supplies. The VAT a company pays when it imports goods can be recovered as input tax in accordance with the standard rules.
Excise duty is charged on certain products when they are:
- imported from third countries;
- purchased from other EU member states;
- produced in the Netherlands.
Excise duties are charged on beer, wine, other alcoholic products, tobacco products and mineral oils. A consumption tax is charged on non-alcoholic drinks, chewing tobacco and snuff. The tax base for consumption tax is the same as that for excise duty.
The government intends to abolish the consumption tax on non-alcoholic drinks, chewing tobacco and snuff on 1 January 2013.